NCUA Vice Chairman Kyle S. Hauptman during a meeting of the NCUA Board in Alexandria, Virginia.
As Prepared for Delivery on November 16, 2023
Thank you, Justin, and Rick, for your work on this rule. It might seem like a small change, but it has the potential to create a significant impact.
As we all know, credit unions grow mainly through earnings.
The charitable donations account (CDA) program provides an innovative way to fund donations to 501(c)3 charities without taking dollars away from regular income. Including 501(c)19 veteran’s organizations as permissible recipients of CDA donations is an appropriate change. In addition to clarity, it provides credit unions another way to support America’s veterans.
In 2013, when this rule was first adopted, the Board believed that including 501(c)3 organizations was not only sufficient but also prudent. But the IRS automatically gives 501(c)19 status to veterans’ organizations when they apply for a 501(c)3 designation. This is to ensure veterans’ groups receive all the benefits intended for them. The absence of 501(c)19 language in the CDA regulation had the unintentional consequence of preventing credit unions from including veterans’ groups as recipients of CDA donations. Today’s vote will fix that inadvertent oversight.
Defense credit unions represent a significant portion of the nation’s credit union system. According to NCUA information, nearly 30 percent of America’s over 137 million credit union members belong to military credit unions. There are also non-military federal credit unions in metropolitan statistical areas with large military populations or military retiree populations. It is fitting to give all credit unions the ability to take advantage of charitable donation accounts to support charities that benefit their military members.
I’d like to thank the defense credit unions and others for bringing this to our attention. I’d like to, once again, thank the Marion County Veterans’ Honor Guard in Kentucky for further educating us on the subject.